Market drivers – US Session – 2 June

US equities edged higher, even despite comments by Fed Vice-Chair Lael Brainard said that the central bank would hardly pause its current rate-hiking cycle amid record inflation levels. Cleveland Loretta Mester said that inflation has not yet peaked and that it’s too early to discuss a potential pause in the tightening path.

The US dollar changed course on Thursday and gave up all Wednesday’s gains and more. Easing government bond yields and lukewarm US employment-related data have put further pressure on the American dollar, later weighed by the positive tone at Wall Street.

Economic Data:

Concerns related to economic growth, likely recession and inflation remain as since the beginning of the week, furthermore after the EU Producer Price Index hit 37.2% in April, above the market’s expectations. Government bonds were up, with yields giving up some of their latest gains.

Private sector employment in the US rose by 128,000 in May according to US payroll company ADP’s latest estimate of employment change released on Thursday. That was below expectations for 300,000 rise and lower than April’s 247,000 gain.

Other Developments

The EUR/USD pair trades near 1.0750, and not far from its weekly high at 1.0786. The GBP/USD pair is also up, trading at around 1.2560. Commodity-linked currencies soared. The AUD/USD pair is now hovering at around 0.7250, while USD/CAD trades at around 1.2570.

Gold soared, trading at its highest in near a month. It is currently changing hands at around $1,870 a troy ounce. Crude oil prices were also up, with WTI trading at $117.10 a barrel. The OPEC+ announce it would increase production by 648,000 barrels per day in July and August amid disruptions caused by Russia’s invasion of Ukraine.

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